Micky Arison

Financial Effects Of Pandemic Likely To Impact NBA Offseason

A number of team owners around the NBA are feeling the financial effects of the coronavirus pandemic, as Brian Windhorst of ESPN.com writes. Rockets owner Tilman Fertitta, for instance, has seen business fall off precipitously at his restaurants, hotels, and casinos, while Heat owner Micky Arison has had to temporarily shut down his Carnival Cruise Lines.

While some team owners have been hit harder than others by the effects of COVID-19, there’s an expectation that the pandemic will have a league-wide impact on spending this offseason, as Windhorst writes. Some teams may have to make difficult financial decisions that could result in unexpected player movement.

“With few exceptions, no one wants to make long-term commitments right now,” one general manager told ESPN. “You can already feel it coming.”

In addition to the teams that may feel pressure to dump pricey contracts or avoid expensive free agent commitments, some clubs may face financial constraints in the draft. Although selling second-round draft picks remains fairly common, no NBA team has sold a first-round pick since the Nuggets did so with the No. 27 selection in the 2013 draft, according to Windhorst. Some people around the league believe that teams will consider the possibility again in 2020.

“I suspect first-round picks will be for sale in this draft,” a team executive said. “We haven’t really seen that in a decade.”

Here are a few more noteworthy details and quotes from Windhorst’s examination of NBA teams’ finances:

  • Warriors owner Joe Lacob has told his fellow owners that he’s exploring a deal with Goldman Sachs to raise up to $250MM to manage expenses, per Windhorst. Sources tell ESPN that other team owners are considering ways to raise capital as well, with some – including the Rockets – pursuing legal action against companies that have denied coronavirus-related insurance claims.
  • Rockets owner Tilman Fertitta recently took out a $300MM loan and is more leveraged than many other owners, since he purchased the franchise fairly recently, but he continues to insist he’s not looking to sell any shares in the team. Brokers who have approached him representing potential bidders have been told the same, reports Windhorst.
  • Nets owner Joseph Tsai recently sold about 25% of his shares in tech company Alibaba, according to Windhorst. Other owners might not have similar opportunities to raise capital. “I don’t know what will happen, but I may lose $50MM next season,” one owner told Windhorst. “If that happens, I have three options: I could borrow the money, I could sell part of the team or I could do a cash call and me and my partners would have to write checks.”
  • NBA rules allow team owners to borrow $325MM against the equity in their franchises. A majority of NBA teams – including the Warriors – have maxed out that credit, sources tell Windhorst.
  • Although the Buss family’s pockets aren’t as deep as some of their fellow owners, the Lakers bring in about $200MM annually from their local TV deal and aren’t expected to have any issues re-signing Anthony Davis, writes Windhorst.

Heat, Wolves Among Latest To Provide Aid To Arena Workers

The Heat and AmericanAirlines Arena announced on Wednesday that they’ll be providing financial assistance to team and arena part-time staffers who have lost work as a result of the coronavirus pandemic, writes Ira Winderman of The South Florida Sun Sentinel.

Heat owner Micky Arison‘s foundation will be donating an additional $1MM to establish an initiative aimed at aiding employees and addressing other community needs in the coming months, Winderman adds.

Timberwolves owner Glen Taylor also announced this week that he’s pledging $1MM of relief to part-time workers at the Target Center, as Chris Hine of The Star Tribune details.

Miami and Minnesota join most of the rest of the NBA’s teams in having announced plans to assist their part-time arena workers displaced by the hiatus. A small handful of clubs, including the Jazz and Thunder, have yet to announce a formal plan or confirm that plans are in motion, but that isn’t to say that those teams won’t implement a program as well.

As Andy Larsen of The Salt Lake Tribune writes, Jazz center Rudy Gobert pledged $200K to part-time arena employees in Utah, but the team has yet to inform its 800+ part-time workers how that donation will be used or whether the franchise itself will be compensating its arena employees for lost games in any way — currently, staffers are only being paid for events they actually worked, according to Larsen, who notes that the Jazz ownership group seems “focused on job placement for their part-time employees, rather than subsidies.”

Heat Notes: Arison, Bosh, Shaq, Reed

Don’t read too much into Heat owner Micky Arison’s “look forward to seeing in camp” tweet to Chris Bosh, cautions Ira Winderman of The Sun-Sentinel. Bosh was expected in camp regardless of his immediate playing status, and he still must pass a team physical before being cleared for any action. Bosh’s health and future with the Heat remain uncertain after missing the end of the past two seasons with blood clots, and Winderman suggests that Miami has few options with the veteran power forward and his hefty contract unless there is “an overwhelming consensus” that his NBA career is over.

There’s more news out of Miami:

  • Bosh may have looked impressive in his on-line workouts, but the Heat need to see him in a contact situation before making a decision on his ability to play with or without medication, Winderman writes in a separate story. That’s why it would be helpful to the team if he is cleared to participate in training camp.
  • Heat president Pat Riley calls the trade that brought Shaquille O’Neal to Miami in 2004 the most important move in franchise history, Winderman relays in another piece. O’Neal, who will be inducted into the Naismith Memorial Basketball Hall of Fame tonight, came to Miami in 2004 in exchange for Lamar Odom, Caron Butler, Brian Grant and two draft picks. He led the Heat to the 2006 title before being traded to Phoenix two years later. “I’ll say this, and I mean this,” Riley said. “Shaq’s acquisition was bigger than any acquisition that we ever made, including the Big Three.”
  • After appearing in just 39 games with the Nets during his rookie season, Willie Reed hopes he has found the right situation in Miami, according to Joe Beguiristain of NBA.com. The 6’10” power forward signed with the Heat in July, accepting a two-year minimum-salary deal with a player option for the second season. Beguiristain notes that Reed often produced when given an opportunity, and scored 14 points to go with eight rebounds and four blocks in a March 5th game against Minnesota.